Property Management Blog

How do Property Managers Deal With Tenants that Don't Pay Their Rent?

System - Tuesday, March 21, 2023
Property Management Blog

Tenant not paying rent? How property managers can help.

Renting out properties can be lucrative, but it can be an arduous task when you don’t know how to collect rent from tenants who don’t pay on time. Tenants can fail to pay on time for various reasons, such as job loss, financial difficulties, or even intentional non-payment. No matter the reason, property managers must handle the situation in a professional, legal, and ethical manner.

Let’s see how property managers deal with tenants who don’t pay on time and how to collect rent from tenants:

1. Send a Reminder

If the tenant has always paid on time, it’s best to send them a reminder if the rent is past the due date. Using friendly methods to remind them can help maintain good relationships between property managers/landlords and tenants.

A written reminder is preferred since it can serve as evidence in future proceedings. Also, when reminding the tenants to pay rent, remind them of your various rent collection methods. That way, they can use alternative payment methods if they have trouble using one option.

2. Follow Up with Phone Calls and Emails

In case the tenant fails to pay after sending a reminder, follow up with phone calls and emails. Try to find out why they haven’t paid. Discuss with them if they might need more time or if they can pay in installments. It’s essential to agree on a new deadline if you allow them more time.

3. Late Payment Penalties

If the tenant fails to pay on time, charge them late payment fees. These penalties can motivate them to pay their rent on time. It also compensates the landlord for not receiving the rent on time. Property managers can include such clauses in the lease agreement to make them easier to enforce.

4. Eviction Notice

An eviction notice may be necessary if the tenant is unable to pay the rent. This notice requires the tenant to vacate the rental property within a given time. Property managers in Florida must follow specific guidelines when issuing an eviction notice. A property manager can serve an eviction notice to a tenant three days after the rent is due.

But they must deliver it to the tenant in person or via certified mail and ensure the tenant receives it. Failure to follow the proper procedures can result in legal issues and delays in eviction.

5. Legal Action

Property managers can file a lawsuit in court if the tenant fails to move out after the eviction notice period has ended. They have to present evidence to support the eviction, such as the eviction notice and any previous communications with the tenant. If the action succeeds, the court will issue an order allowing the property manager to repossess the house and remove the tenant if necessary. Usually, they hire a sheriff to carry out the eviction.

6. Using Collection Agencies

Property managers may sometimes need to work with collection agencies to recover unpaid rent. Collection agencies specialize in debt collection and have many techniques for recovering money from defaulters. Using a collection agency can also save time and resources, allowing property managers to focus on managing the properties.

How to Collect Rent from Tenants

Rent is a recurring payment, which requires a convenient payment method. Therefore, the selected payment services should be accessible to all tenants. Otherwise, ensure you have several options and let the tenants choose the most convenient one. Below are some common methods for collecting rent payments from rental property owners:

  • Set up automated rent payment systems - Being able to pay rent online is highly convenient for tenants since they can do it from anywhere at any time. Property managers can use third-party software to collect online rent payments. Tenants can register on those platforms using credit cards and debit cards.
  • Bank transfer - Tenants can transfer rent directly from their bank account to the rent collection account. It’s a simple method, but it may require your tenants to have access to online banking.
  • Check - Tenants can pay rent by writing a check and handing it to you. This method can be inconvenient as it requires physical mailing or in-person delivery. But it’s more secure than a money order and ideal for paying large amounts.

How Property Managers Minimize Rent Default

Unpaid rent can negatively impact a landlord’s credit score and financial stability. That’s why property managers do their best to avoid payment defaults. They do this by thoroughly screening potential clients, setting up online rent collection methods, and communicating consequences for non-payment.

Tired of chasing down unpaid tenants? Let Tourtelot Property Management handle it for you. We can help screen tenants, follow up with them to get them to pay on time, set up automated rent payment systems, and handle maintenance and repairs.

Contact our property management company for more information on how we can help you.

Free Rental Analysis